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Credit Cards

Everything You Need to Know About Interest Rates on Credit Cards

If you have a credit card or plan to get one in the future, it is important to know how interest rates or APR works. The interest rate is the percentage of your total monthly bill that you have to pay in addition to the principal amount. The more you understand about these rates, the better off you are going to be. Those who do not have an intimate knowledge of interest relating to credit cards are usually the ones who get into debt very quickly.

How it Works

Let’s say that you use your credit card to buy something and spend £1,000 total. If you have an APR of 20% with your credit card, you will owe an additional £200. This is assuming that you wait until after the grace period to pay your bill. The grace period is a certain length of time (usually the first couple weeks at the beginning of the month) where you can pay off your card interest-free. Once the grace period is up, you will need to pay the interest along with the principal.

What will my Rate be?

The interest rate that you get with your credit card will depend on a few different factors, including the state of your credit. Those who have higher credit scores tend to get lower rates. Make sure that you know what your interest rate is going to be for your card so that you aren’t surprised when you get your first bill. If you already have a card but don’t know what your rate is, you can contact your bank to find out.

Making Payments

You will be required to make a minimum payment on your credit card each month. It is highly recommended that you pay more than the minimum amount so that you can clear your balance was soon as possible. The lower your payments are, the more interest you will end up being charged. One of the most common reasons for serious credit card debt is people failing to make big enough payments each month.

Those who use a credit card should set automatic repayment for a certain amount each month. This will remove your temptation to only pay as much as you have to. As painful as it may be, it is a great method of getting out of debt as soon as possible.

Balance Transfer Cards

A lot of people get into the habit of transferring their debt from one credit card to another to avoid having to pay more interest. You can take all of the debt on your current card and put it on another one with 0% interest. It is important to keep in mind that the zero percent interest on the other card will only last for a certain period of time. There aren’t any credit cards that are 0% APR forever. This can be a good short-term way to keep your debt down, but it is not an effective long-term solution.

Representative APR

You will also need to know about representative APR, which is the interest rate that financial institutions charge for most of their members. Banks are required by law to give their advertised rates to a majority of people who apply, provided they are customers. The people who get the higher rates are usually those with spotty credit histories.

Finding the Best Interest Rate

The most effective means of finding the lowest rate for your credit card is to just do some research online. The more time you take to look into your credit card options, the easier it will be to get a good overall deal. Some cards come with higher rates than others, but your credit will also impact how high or low it is going to be. If you are currently a college student, there are cards with low introductory rates that you can take advantage of. Just make sure that you know when the introductory period comes to an end.

How to be Responsible with your Credit Card

Whenever you think about buying something with your credit card, you should always remember the interest that you will have to pay on top of the principal. This can be an effective way to reign in your spending. It can be very easy to sink into a deep pit of debt when you don’t allow yourself to think about how much you will actually need to repay when the time comes.

No matter what credit card you have, you will eventually have to pay interest on your purchases. Try to pay off your balance within the grace period when you can. If you are late on a payment, you will be charged extra. Make prompt payments on these bills will keep you out of debt.


Essential Financial Tips for Students in the UK

If you are currently a student attending university, you probably need to save all the money you can. In this article you will find a number of helpful tips for saving a significant amount of money to make your time as a student more comfortable. Most young people in college don’t even realize how many different ways there are to cut down on expenses. These tips can make your life a lot more manageable overall until you graduate and find a job.

Tuition Fee Loans

There are loans that you can apply for with the government to get part of or even all of your tuition taken care of. Not everyone is eligible for these loans, but they are definitely still worth looking into. Those who live in Wales, Scotland or Northern Ireland could get their tuition costs covered by the government. If you are studying at a university that is privately funded, this is a great way to reduce the amount you spend on your education as a whole.

Maintenance Loans

You can also apply for payday loans, which will help you with the cost of living while you are a student. If you are living at home, you can get up to £7,000 in financial assistance. If you are not living at home outside of London, you could get nearly £8,500. The amount of assistance that you receive depends on your specific situation. These loans can really help with cutting costs during your time at university.

Postgraduate Students

If you are going for your master’s degree and are under the age of 60, you could get as much as £10,600 in financial assistance for the cost of tuition and living expenses. You will have to pay back the money, but not until you are making at least £21,000 annually.

Scottish Students

If you are a resident of Scotland and studying in this country, you can get up to £7,625 in financial assistance in the form of a loan. The amount that you receive will depend on your household income, so you need to keep that in mind. If you earn £34,000 or more, you can get up to £4,750. There is also a grant for living expenses that is available for single parents who have dependents. The disabled student’s allowance offers financial help for those who have a diagnosed learning disability of some kind.

Welsh Students

If you are a Welsh university student, you won’t have to begin repaying your student loans until you are making at least £25,000 annually after graduation. There are numerous loans and grants available to these students, and it’s highly recommended that you apply for them. Chances are you will be able to get some level of financial assistance to help cover at least part of your expenses. Welsh students who are living with their parents can get up to £6,650 in financial assistance, depending on household income.

Northern Ireland

If you are studying at university in Northern Ireland, there are two main forms of financial help you can apply for. The first is the Maintenance Grant, which helps with daily living expenses. There is also the Special Support Grant, which can help cover your tuition costs up to £3,400.

You will be able to apply for these grants when you apply for normal student loans. There is no guarantee that you will get approved, but it is certainly worth trying. Thousands of students in Northern Ireland get these loans and grants each year.

Create a Budget for Yourself

Every student should establish a budget for themselves. Take the time to write down every single recurring expense you have on paper. By doing this you will know how much you can spend each month and maybe even find ways to save money.

This is an important part of being a fiscally responsible adult, and it will serve you well for the rest of your life. Those who do not have a budget that they stick by usually end up in debt very quickly. If you want to remain financially free, you absolutely need to do this. Make sure to update your budget as your expenses change.

Final Thoughts

Being a student usually means having to stretch every dollar as far as it will go. This information can help you stay on track financially while forming good habits that will carry on long after graduation. There are most likely a lot of different approaches you can take to minimize your expenses while you are attending school. The more creative you are with your approach, the more money you will save. Despite what you may have been told by others, you don’t have to be dirt poor until you find your first real job after finishing school.